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To Rule or Not to Rule: IRS Updates for 2023 its No-Ruling Lists for Private Letter Rulings

By Anthony P. Daddino on January 3, 2023
Should you need either 100% tax certainty or the IRS to fix a past mistake, a private letter ruling may be the answer for you. There are areas, however, where the IRS will not issue a ruling. And for 2023, those areas have now been defined.

I previously blogged on the nuts and bolts of the IRS private letter ruling process linked (HERE).  In short, a private letter ruling is a written decision by the IRS in response to a taxpayer’s request for guidance or relief. The IRS will issue a ruling on most tax issues. However, there are areas in which the IRS will not issue rulings because the issues are inherently factual or because the IRS simply does not want to. The IRS publishes guidance each year setting out these “no-rule” areas, and true to practice, the IRS just issued two revenue procedures defining the “no rule” areas for 2023 for domestic transactions (Rev. Proc. 2023-3) and international transactions (see Rev. Proc. 2023-7). Both revenue procedures are linked HERE.

While understandable, it is nonetheless frustrating to see the IRS refuse to issue rulings in areas of high IRS enforcement, such as whether a taxpayer is engaged in a trade or business for purposes of IRS Sec. 162 and whether compensation paid is reasonable in amount.

Private letter rulings are a regular part of my practice. If you have any other questions about the PLR process, or my recent experiences securing PLRs for my clients, please do not hesitate to contact me at (214) 749-2464 or adaddino@meadowscollier.com.